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Top reasons for E&O insurance claim denials

On Behalf of | Nov 20, 2023 | Insurance Law |

If you own a business, then you should ensure that you have enough coverage in place to cover losses if something goes wrong. While this includes insuring your property, it also means protecting yourself from professional liability, such as when your or a partner’s negligence results in damages.

Insurance that insulates you from these acts, referred to as errors and omissions insurance (E&O insurance), can help offset costs associated with court, settlements, judgments and other damages. Yet simply because you have this insurance doesn’t mean that a filed claim with be granted. In fact, business often find themselves battling with their insurance company over these claims.

Why E&O insurance claims are denied

When an insurance company denies an E&O claim, it must specify its reason for doing so. These justifications might include:

  • Evidence that the error or omission was attributable to intoxication.
  • The damages were caused by illegal activity.
  • The act in question was not tied to the provision of professional services.
  • The act involved employment-related practices, such as hiring, promoting, and terminating employees.
  • You knew about the problematic act in question prior to securing your E&O policy.
  • The issue at hand is tied to harm caused by advertising issues, such as false advertising.
  • The damages resulted from an inability or failure to protect personal information.

Every E&O policy is different, so this is by no means an exhaustive list of restrictions that you might face. So, make sure you fully analyze your policy so that you have a full understanding of what it can do for you and when you need to push back against your insurance company.

Do you need to contest an E&O claim denial?

If so, then you need to gather evidence that speaks to the denial justifications provided by your insurance company. Armed with this information and an understanding of the law and the legal process at hand, you’ll be ready to fight for the fair outcome that you deserve.


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